Your end of financial year checklist
Superannuation | 5/06/2017 |
4 min read
If you have recently sold an asset or received a windfall time is running out to take advantage of favourable tax and superannuation rules.
The 2016-17 financial year is your last opportunity to make a non-concessional (after tax) contribution of up to $180,000 to your super account - or up to $540,000 under the ‘bring forward’ option. This rule allows people under 65 to make three years’ non-concessional contributions in the current financial year by bringing forward two years’ contributions.
From 1 July the annual non-concessional cap reduces to $100,000 (for members aged 65 to 74) and $300,000 (for members younger than 65) under the bring forward rule. What’s more, anyone with a total super balance of more than $1.6 million at the end of this and future financial years will not be able to make any more non-concessional contributions.
Taking advantage of the above places your money in the super environment, where investment earnings are taxed at 15 per cent instead of your marginal tax rate and are tax-free in pension phase.
Take advantage of government contributions
Low and middle income earners may also be able to boost their super balance, thanks to government contributions.
If you earn less than $36,813 this financial year and make an after-tax contribution to super, then you are entitled to a government co-contribution of up to $500. The co-contribution tapers out once you earn $51,813.
Also, low income earners on incomes below $37,000 may be eligible for a government-paid low income super contribution (LISC). This payment is equal to 15 per cent of your or your employer’s concessional contributions over the financial year up to a maximum of $500.
Bring forward expenses, delay income
The countdown to June 30 is not all about super; some simple financial housekeeping tips could help you reduce your tax bill.
Begin by collecting all supporting receipts and documentation for any work-related expenses. Where possible, bring forward tax-deductible expenses to the current financial year and delay income until July. This is especially worthwhile if you think your taxable income will be lower next financial year.
After a mixed year on global sharemarkets, you may be sitting on paper losses on some of your stocks. This could be a good time to consider selling some of your poor performers to offset against capital gains made on the sale of other investments over the past 12 months. Look to sell investments held for at least 12 months if you want to take advantage of the 50 per cent capital gains tax discount.
Residential property has had a mixed year across the country, with the boom continuing in Sydney and Melbourne and prices falling in the West. With interest rates on investment loans on the rise, it’s more important than ever to claim all allowable rental property deductions.
The tax and investment landscape is constantly changing and growing in complexity. If you want to take advantage of the current super rules or traditional end-of-financial-year tax-saving strategies you can either consult with your accountant, or speak to an Equip financial planner.
This information is provided for general information only. It does not take into account your personal objectives, financial situation or needs and should therefore not be taken as personal advice. You should consider whether it is appropriate for you before acting on it and, if necessary, you should seek professional financial advice. Before making a decision to invest in the Equipsuper Superannuation Fund, you should read the relevant Equip Product Disclosure Statement (PDS). Past performance is not an indication of future performance. Issued by Equipsuper Pty Ltd ABN 64 006 964 049 AFSL 246383.